The cities of Hamilton, Tauranga, Whangarei, New Plymouth and Wanganui will be among the first to benefit from the government’s rollout of ultra-fast broadband (UFB), says the Minister for Communications and Information Technology Steven Joyce.

Crown Fibre Holdings has concluded negotiations with two partner companies, following shareholding ministers’ approval of the deals over the weekend.

The new companies will rollout fibre in Whangarei, Hamilton, Cambridge, Te Awamutu, Tauranga, New Plymouth, Wanganui, Hawera and Tokoroa.

Northpower will commence its roll out in Whangarei before Christmas with Ultra Fast Fibre expected to begin laying fibre early in 2011. Both companies will have completed their rollouts by 2015.

These joint ventures represent nearly 16 per cent of UFB premises and a combined value of more than $200 million. The UFB Initiative will see 75 per cent coverage of ultra-fast broadband across New Zealand by 2019.

Mr Joyce says the availability of ultra-fast broadband is a key part of the government’s economic growth agenda.

“This is very good progress in the roll out of UFB, which will see new fibre services available in Whangarei by the end of this year and in the areas covered by Ultra Fast Fibre Limited commencing early in 2011.

“The access prices CFH has negotiated will ensure the benefits of fibre are within reach of businesses as well as everyday New Zealanders.”

Wholesale household prices will start at $40 or less per month for an entry level product and $60 per month for the 100 Megabit product. There are no connection charges for households.

Mr Joyce says the two new partners share the government's vision of the transformative ability of ultra-fast broadband.

“I am very pleased to have them on board and look forward to more partners being approved in the coming months.”

CFH will shortly announce a list of parties with whom it will next elect to negotiate with in the remaining 25 UFB regions.

Ok, maybe I am misunderstanding CIR here (so feel free to correct me) but the committed information rate part on that table would imply that the $40 price would only be for a CIR of 2.5Mbps, wouldn't it? i.e. that the line might 'allow' 30Mbps (like ADSL2+ 'allows' 24Mbps) but in reality you would only be guaranteed 2.5Mbps at that basic price - which seems pretty pathetic IMO.

NonprayingMantis: Ok, maybe I am misunderstanding CIR here (so feel free to correct me) but the committed information rate part on that table would imply that the $40 price would only be for a CIR of 2.5Mbps, wouldn't it? i.e. that the line might 'allow' 30Mbps (like ADSL2+ 'allows' 24Mbps) but in reality you would only be guaranteed 2.5Mbps at that basic price - which seems pretty pathetic IMO.

Oh dear...

The wholesale indicate price of (for example) $40 for the "30Mbps" plan is equivalent to the naked EUBA services... See the following comment from the CFH FAQ...

"UFB pricing is at wholesale level and end users should bear in mind that prices of retail UFB services will reflect non-Local Fibre Company costs, such as national backhaul, international bandwidth, provisioning, billing and so forth. CFH, Northpower and UltraFast Fibre intend to publish final UFB wholesale prices prior to initial sales of retail UFB services. The following are indicative of expected products and prices and are initial prices only. Prices are per month excluding GST"

$40 is a SMALL input to the final price a consumer will pay... I predict almost everyone will lose sight of this and be terribly surprised when they can't buy a 30Mbps service for $40.

NonprayingMantis: Ok, maybe I am misunderstanding CIR here (so feel free to correct me) but the committed information rate part on that table would imply that the $40 price would only be for a CIR of 2.5Mbps, wouldn't it? i.e. that the line might 'allow' 30Mbps (like ADSL2+ 'allows' 24Mbps) but in reality you would only be guaranteed 2.5Mbps at that basic price - which seems pretty pathetic IMO.

I think that's right... but I believe that the CIR of current DSL is 45 kb/s. I'm sure someone will correct me if I'm wrong though :)

Wow - I have to say that I am pleasantly surprised at the cheap pricing for this.

It does not make much sense to me.

So many questions

Are data charges going to be on top of this base price? How are the plans going to be structured? How is excess usage going to be handled? Is the Southern Cross Cable going to decrease the cost of international bandwidth?

Also the maths does not add up for me.

Currently to get fibre to one place if the fibre runs past your building it costs around $6000 to dig a hole and connect up the building, so divide this by the 1.5 billion this equals only 250,000 houses and businesses connected to fibre.

Does someone else have a better understanding of how this is going to work?

cyberhub: Wow - I have to say that I am pleasantly surprised at the cheap pricing for this.

It does not make much sense to me.

So many questions

Are data charges going to be on top of this base price? How are the plans going to be structured? How is excess usage going to be handled? Is the Southern Cross Cable going to decrease the cost of international bandwidth?

Also the maths does not add up for me.

Currently to get fibre to one place if the fibre runs past your building it costs around $6000 to dig a hole and connect up the building, so divide this by the 1.5 billion this equals only 250,000 houses and businesses connected to fibre.

Does someone else have a better understanding of how this is going to work?

And there in lies the rub. What has been highlighted is the WHOLESALE price. That is the equivalent of the price that Telecom charges itself and ISP's for Unbundled Bitstream Access or Naked/Clothed DSL.

So it will be up to ISP's to charge as they choose for retail price plans. And they may charge for data and they may charge for overage.

Take a look at XFNet or Ubergroup as examples as to retail fibre pricing in Northland - as thats one of the areas awarded and the closest to a working example visible to one and all.

DONT ASSUME THAT $40 WILL BE THE ENTRY RETAIL PRICE. Say it 1000 times and see if it starts to sink in.

As to the economics of the build. There are undisclosed elments of these deals. There may be contributions of capital to the build by the announced partners. And the $1.5bn (actually $1.35bn as some cash has already been given away) includes capital recycling. When the partners grow theie business then they progressively buy the Govts stake in the build freeing up the cash to continue investing.

cyberhub: Wow - I have to say that I am pleasantly surprised at the cheap pricing for this.

It does not make much sense to me.

So many questions

Are data charges going to be on top of this base price? How are the plans going to be structured? How is excess usage going to be handled? Is the Southern Cross Cable going to decrease the cost of international bandwidth?

Also the maths does not add up for me.

Currently to get fibre to one place if the fibre runs past your building it costs around $6000 to dig a hole and connect up the building, so divide this by the 1.5 billion this equals only 250,000 houses and businesses connected to fibre.

Does someone else have a better understanding of how this is going to work?

Even the ISP's do not know what products and services they will offer.

But, you can extrapolate from todays plans, and from what is offered overseas.

1.Data charges may of course be on top depending on plan. Data hogs will be a problem on the new network too.

2. Isn't this part of 1? There will be plans priced for different speeds, some will be capped, some will not be capped.Some may offer free national data. Some will include calls. There will be new phones for the new network. Some may offer triple play, data, video, and phone. The new network may become sky's largest competitor. Video conferencing built into HD TV's may become common.

3. Excess usage will be charged by some ISP's, given free by others, depending on your plan.

4. Southern cross will continue to set prices according to market forces. I don't see the new network will decrease southern cross charges. But,Sam Morgans new undersea cable may drive down prices after/if it is built.

Assuming that the numbers in my head are right with regards to the current cost of wholesale DSL, etc , I'd expect an ultra spartan package with minimal data allowance to be around the $50-60 mark, with most standard home plans in the $70-100 range, and the premium home offerings in the $100-200 range.

I would expect that things like VOIP lines, IPTV, etc will be offered as additional extras eventually, but probably not for early adopters.

This is purely guestimation mind you.

Information wants to be free.The Net interprets censorship as damage and routes around it.